Checking in on Tax: The Evolution of Checkpoint Taxation in Afghanistan

Abstract

Checkpoints play a crucial role in regulating movement, enforcing customs regulations, collecting import duties, ensuring security, and conducting necessary inspection. For example, the Indian municipalities, up until 2017, implemented Octroi and Entry Tax, a form of checkpoint taxation. These taxes were levied on goods entering a municipality or state at designated checkpoints, contributing significantly to local revenue. In the East, during Japan's Edo period, the Tokugawa shogunate followed a similar approach, establishing barrier stations or 'sekisho' along principal highways. This served the dual purpose of tax collection and regulation of movement of people and goods. In fragile and conflict affected states non-state actors, such as armed groups and warlords, also set up informal, illegal, and unauthorised checkpoints specifically for tax extraction. This paper is concerned with the latter approach to checkpoint taxation. Accordingly, the paper defines checkpoint taxation as the imposition of arbitrary charges on individuals and vehicles passing through informal, illegal, or unauthorised checkpoints that are set up by non-state actors.

Prior to their rise to power, the Taliban established illegal checkpoints, utilising informal taxation practices to accumulate revenue and assert control over territories. With the Taliban now in government, these checkpoints have transformed into formal legal checkpoints for tax extraction, representing a consolidation of power and the institutionalisation of revenue generation mechanisms. This transition highlights the power of informal, illegal taxation as a mechanism for non-state actors to amass revenue and solidify their hold on power, challenging the authority and legitimacy of the formal state. Moreover, it poses challenges to state building efforts by undermining the state's capacity to establish effective governance, provide essential services, and generate revenue for development. Understanding and addressing the implications of this transition is crucial for promoting stability, strengthening state institutions, and advancing sustainable state building in fragile and conflict-affected states.

Consequently, the prevailing Afghan regime’s employment of checkpoint taxation is thus to be considered as a significant aspect in the context of state building and the consolidation of their administration as the sole extractive sovereign in Afghanistan. Considering this, the paper reflects on the evolution towards formalisation of the Taliban imposed checkpoint taxation as a political and governance move towards state building and fiscal legitimacy. This demonstrates the role of taxation in the formation and consolidation of power by state capture by previous non-state actors.

In this analysis, my intention is to reflect on Easterly's roving and stationary bandit concepts in the context of the formalisation of checkpoint taxation and what this means for state building and fiscal legitimacy in Afghanistan. To properly understand the implications of non-state actors from roving bandits to stationary bandits and finally, to state builders, I introduce Ibn Khaldun’s premises on state formation to better understand how this manifests in the Taliban's evolving power dynamics leading to state building from the perspective of checkpoint taxation understood as a continuum spanning from initial informal, illegal and unauthorised revenue extraction to its subsequent formalisation and legalisation as an official taxation system. The outcome of this reflection is to conceptualise the role taxation during conflict can play in subsequent state building and fiscal legitimacy by formalising informal and unauthorised taxes.

Keywords: Afghanistan; checkpoints; tax; informal tax; illegal tax; opium; roving bandit; stationary bandit